Wednesday, May 8, 2013

MSFT: Why We Bought Microsoft: Because 2013 Should Determine Whether Ballmer Stays Or Goes

Why We Bought Microsoft: Because 2013 Should Determine Whether Ballmer Stays Or Goes
by Helix Investment Research

We have written at length about Microsoft (MSFT) in the past, and have repeatedly stated that one of, if not the key reason why we have hesitated to buy shares of the company is the continued presence of Steve Ballmer as CEO. Our criticism of Ballmer stems not from a collapse in revenue or profits under his tenure, but largely from his presiding over a corporate culture that promotes vicious infighting and corporate politics that lead to an inability to innovate in truly meaningful ways. That, combined with Ballmer's track record of firing subordinates that he sees as a threat to his power, has led to a persistent inability to craft truly meaningful commercial breakthroughs that go beyond incremental updates to Windows, Office, or the Xbox. There is a difference between research & development and commercial innovation, a distinction Microsoft has for years failed to grasp. As we have written previously, Microsoft employs many intelligent and qualified engineers and scientists, and the company spends far more on R&D than Apple (AAPL) or Google (GOOG). But Microsoft's billions in R&D spending have led to a myriad of projects that have either failed to see the light of day or, in the case of the Zune or the Kin, have been commercial failures. And at the end of the day, there is only one person responsible for this: Steve Ballmer. read more »

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